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Are UN Sanctions Against North Korea Working?

August 15, 2016

In this June 27, 2016, photo, North Korean men cycle, while others walk past buildings under construction on “Ryomyong Street,” in Pyongyang, North Korea. Leadership is hoping to show the world the country is doing just fine despite sanctions and outside pressure over its nuclear weapons program.

United Nations’ economic restrictions ordered against North Korea in March have produced mixed results.

Prices for goods in North Korea have remained stable. Reports note that business has slowed at the economic development zones. These zones were designed to appeal to foreign investment.

Lim Eul-chul is a professor of Korean Studies at Kyungnam University in South Korea. He spoke with VOA’s Korean Service. He said economic activity decreased in two development zones near the Chinese border in the last five months.

Lim said China had planned to invest in the Mubong Economic Development Zone and the Onsung Island Economic Development Zone. But development in the zones stopped after China took part in the U.N. sanctions against North Korea.

The U.N. sanctions increased financial restrictions on companies that do business with North Korea. The United States also ordered sanctions against North Korea. They include measures to seize money and property from organizations and individuals involved with North Korean industries.

Adam Cathcart is an East Asia expert at Leeds University in Great Britain. He said that even without sanctions, international companies are reluctant to invest in North Korea's economic development zones. He added the zones do “not provide enough infrastructure.”

China slowdown

China is important to the North Korean economy. Close to 90 percent of North Korean trade flows either to or through China.

Last year, North Korean exports dropped almost 15 percent before the sanctions were in place. The Bank of Korea says the economic slowdown in China was the main cause of the drop.

Other reports suggest that sanctions are having some effect. Observers noted a drop in vehicle traffic at the Chinese and North Korean border. Some money transfers to North Korean banks have been suspended. Officials also have increased inspections of North Korean shipments entering Chinese ports.

However, there are also reports that say sanctions have not affected food and fuel prices.

A North Korean worker looks from behind a piece of machinery at the Pyongyang 326 Electric Wire Factory, seen during a press tour on Friday, May 6, 2016.

News reports from Seoul show that the price of rice, corn, pork and fuel remained stable over the last year.

The reports say the price of gasoline increased by 45 percent immediately following the announcement of sanctions. But reports say the prices soon returned to normal.